Letter to the Parliamentary Commissioner
for Standards from Mr Dean Nelson, Scotland Editor, The
Observer

Further to our telephone conversation earlier this
week, I`m writing to make a formal complaint against John Reid
MP and John Maxton MP.

The essence of my complaint is that the two men misled
the Fees Office and abused public money by using Westminster allowances
to pay salaries to full time campaigners in Labour`s Scottish
Parliament election campaign. I believe both men falsely passed
off these campaigners as Westminster researchers in order to help
fund Labour`s campaign.

The campaigners in question are Mr Reid`s son Kevin
Reid, Suzanne Hilliard and Chris Winslow, who is now a special
advisor to Donald Dewar. Kevin Reid was given a part-time contract
by the Labour Party in May 1998, but in fact worked full time.
He was also paid part-time by his father as a researcher. Mr Reid
had suggested his son could help the campaign following a meeting
of Labour`s Scottish Strategy Group at Keir Hardie House, Glasgow
in April 1998. I believe the meeting was attended by Donald Dewar,
Gordon Brown, Brian Wilson, John Reid, then Scottish party General
Secretary Alex Rowley and Head of Communications Paul McKinney.
McKinney and Rowley had criticised the politicians present for
talking a great deal, but doing little, starving the campaign
of the resources they needed to tackle their opponents.

I`m reliably informed that Reid then offered to transfer
his son Kevin to the campaign to help out. Kevin was not doing
much, he said. He could help the campaign and Reid "would
find a way of paying him." Although the offer was made to
McKinney, the details of the arrangement were worked out between
Alex Rowley and John Reid. Kevin Reid began work as a media monitor,
with Paul McKinney as his line manager.

In October, Rowley approached Reid to discuss ending
Kevin`s party-time payments from his father. There had been press
reports attacking the Conservatives for similar practices. The
Scottish Labour leadership felt Reid`s employment of his son in
similar circumstances would look very bad if it came to light.
It was agreed to end his part-time employment for his father and
to move him onto a full-time contract with the party.

The part-time salary which had been paid to Kevin,
was then switched to a Labour campaign volunteer, Suzanne Hilliard,
who worked effectively as Kevin`s deputy in the media monitoring
unit. She took charge of the unit after Kevin injured his arm
shortly before last year`s election.

Although Rowley and his colleagues knew the arrangement
to be against Westminster rules, they were not concerned about
Hilliard receiving Reid`s money. Their main concern was the sensitivity
of Reid senior employing his own son in breach of the rules.

Chris Winslow was paid by John Maxton MP, who also
later paid Suzanne Hilliard despite her full time work for Labour`s
campaign. As one senior party official told me, "there were
no part-timers". Labour`s office manager throughout this
period was Anne-Marie White, and the person who controlled the
campaign budget was John Rafferty, who worked until recently as
Donald Dewar`s chief of staff.

I have spoken to many senior Labour officials and
politicians to confirm the truth of the arrangements described
above. I`ve agreed to protect their identities, but they will
give evidence in court if Reid or Maxton or if called by you.
All the interviews were recorded on tape.

It is clear that the party officials named above
and Donald Dewar were all aware of these arrangements at various
times. It is important to establish when Donald Dewar, now First
Minister of Scotland but still a Westminster MP, knew about the
arrangement. It was he who signed the statutory order requiring
parties to submit all election expenditure, and secured funding
for the Scottish Election Commission which monitored election
funding. These arrangements were not declared to the SEC or to
the Secretary of State for Scotland who was responsible for monitoring
election spending. The Secretary of State at the time was John
Reid, clearly with a conflict of interest.

If Donald Dewar knew before reports were submitted
under the statutory order and the SEC, then he has remained silent
about a serious breach of Westminster rules.

I do not know whether Gordon Brown or Brian Wilson
were aware of the arrangements for paying Kevin Reid, Suzanne
Hilliard and Chris Winslow from Westminster allowances, but I
believe all the others named in bold were aware or became aware
long before The Observer`s report was published last week. I hope
you will be able to call them as witnesses to explain these arrangements
to you in detail.

I am moving to a new job (Assistant Editor, Politics)
at The Scotsman next week (from February 1st), but I will be contactable
at the same email address and on the same telephone numbers.

I will of course help all I can in any investigation
you may conduct.

26 January 2000[Attached: Article from The Observer,
23 January 2000headline "Reid hit by poll cash scandal".]